Stocks slide as financials again pull back (UPDATED: 1:23 p.m.)

Monday

Jul 28, 2008 at 6:48 AMJul 28, 2008 at 10:24 AM

NEW YORK (AP) — Wall Street again surrendered to investors’ anxiety about the financial sector today, sending the Dow Jones industrials down 240 points and back into bear market territory. The flight from equities sent investors into safe-haven bets like Treasury bonds.

NEW YORK (AP) — Wall Street again surrendered to investors’ anxiety about the financial sector today, sending the Dow Jones industrials down 240 points and back into bear market territory. The flight from equities sent investors into safe-haven bets like Treasury bonds.

Financials, which had rallied in recent weeks after logging huge declines, suffered from the same worries about souring debt that caused an abrupt end to their run-up late last week. Wall Street is concerned that a further withering of the housing and credit markets will damage bank balance sheets.

An International Monetary Fund report added to some of the stress in the market. The IMF predicted continuing problems in the credit and housing market that will continue to hurt the financial industry. It said, “at the moment a bottom for the housing market is not visible.”

Frederic Dickson, chief market strategist at D.A. Davidson & Co., said investors are still trying to get a longer-term view on the stability of the banking industry, particularly the regional banks.

“Corporate depositors and individual depositors are looking at balances at individual financial institutions. I think that’s unsettling some of the banks.”

On Friday, federal officials closed branches of the 1st National Bank of Nevada and First Heritage Bank N.A. — owned by Scottsdale, Ariz.-based First National Bank Holding Co., adding to investors’ jitters about the ability of some banks to stay afloat.

According to preliminary calculations, the Dow Jones industrial average fell 239.61, or 2.11 percent, to 11,131.08.